Republican congressional candidate John Jacob may have used a legal loophole to hire two Chileans who were apparently legal residents without work eligibility.

Jacob has professed a hard-line stance against illegal immigration in his bid to unseat Rep. Chris Cannon, R-Utah, in the 3rd District primary race. Jacob says he did nothing wrong when he helped the two Chileans set up a company.

In the days leading up to the June 27 primary, Jacob has attacked Cannon as a key supporter of President Bush's immigration-reform proposals.

Allegations were first raised Wednesday that Jacob had hired an illegal immigrant and her husband, who were here on a student visa without work eligibility.

Jacob said Thursday that he sponsored Oscar and Marta Silva, in part through a company the two set up called The Office Specialist of Utah. He said Marta performed some secretarial and domestic work. Oscar, who had a student visa, did some part-time grounds work during the summer, Jacob said.

"Anybody has a right to set up a company in America," he said. "And by setting up a company and paying the company, that's legal and OK.

"I found out how to help someone who was legally here — they were legal immigrants," he added.

Jacob said that over a four-year period, he paid more than $100,000 in gifts and cash to the company, for Oscar Silva's nursing education at Salt Lake Community College and to help the couple pay their mortgage and raise their three children.

Jacob said that the two were determined to keep their legal status. After Silva graduated, Marta lost her legal status and returned to Chile for about six months, he said. Oscar Silva is currently a lieutenant in the Army Reserves.

Glen Sexton, Jacobs' former accountant, said Marta Silva did domestic work at Jacob's home from 1999 until May 2000 and was usually paid cash.

She then went to work in his office, but the arrangement changed because Marta Silva was not employable with federal I-9 requirements, according to Sexton. The Office Specialist of Utah was set up, with Marta Silva as the sole employee.

"As such, Marta was 'contracted' to work as a clerk in Mr. Jacob's company and paid on a monthly salary, regardless of her hours worked or not worked," Sexton said in a statement.

He said Jacobs paid for Marta Silva's schooling plus an all-expenses-paid vacation to California. When Marta Silva had a back injury, unrelated to her employment with Jacob, the payments continue, Sexton said.

Sexton said he did not know of any payments to Oscar Silva or any other foreign nationals.